The truckload market never stands still. Chris Caplice, chief scientist with DAT Freight & Analytics, lays out the dynamics of a business that's constantly riding the ups and downs of supply and demand.

The truckload market is “massive,” says Caplice, involving more than 200,000 carriers and valued at around $320 billion. It’s also highly fragmented, with 96% of all truckload carriers owning fewer than 20 units. As a result, “no one makes the market” — neither big shippers nor carriers and brokers. “The market makes itself,” he says, “because there are so many smaller players with low barriers to entry and exit.”

Observers make the mistake of viewing the truckload market in simple terms, consisting of “a box on wheels,” Caplice says. On the contrary, its dynamics are highly complex, with supply and demand rising and falling in waves. And the balance is constantly changing.

Surging consumer demand caused by the COVID-19 pandemic brought more capacity into the market, but the increase largely took the form of more owner-operators rather than the actual number of trucks on the road. When demand cratered, causing a “freight recession” in which spot rates fell below contract rates, many latecomers found themselves burdened with expensive rigs and no freight to fill them.

That said, the owner-operator sector is highly fluid. When business drops, drivers can park their trucks and take other work, such as in construction. “Capacity leaves the market,” Caplice says, “but it’s ready to come back in.”

Truck driving can be a hard life, but for owner-operators driving long distances, “it’s probably the best entrepreneurial route for blue collar,” Caplice says. The biggest problem for truckers today, he adds, is the lack of efficiency in loading and unloading, and the long hours of waiting at the dock. “Drivers get treated horribly,” he says.